Falling HMI prices led to a shrinking market during 2012

10 July, 2013

The global market for operator terminals shrank by 3.3% during 2012, to a total value of $2.2bn. The decline, following two years of strong double-digit growth, was due largely due to the prices of operator terminals falling by an average of 4% during the year, according to a new report from IMS Research, now part of IHS.

But the analyst expects the 2012 drop in sales to be erased by a 5.4% increase this year, which will take total revenues back up to $2.3bn.

It predicts that average prices for operator terminals will decline more slowly as the global economy stabilises, and as products with new functions and technologies reach the market. These developments will persuade machine-builders and end-users to return to more expensive terminals, it suggests.

“Operator terminal revenues from many important sectors – such as food and beverage machinery, as well as in packaging machinery – are forecast to perform strongly in 2013,” reports IHS’ HMI analyst, George Dickinson. “Such a development will lead to investment in new plants and machinery in these industries, which will benefit the operator terminal market.”

According to the report, many of the fundamentals of the HMI market remain strong. It points out that even as sales of operator terminals faltered during 2012, machinery production continued to grow.

Reacting to the continuing economic uncertainty during 2012, many machine-builders chose to buy less expensive terminals in an effort to cut their costs.

The Asia-Pacific market suffered in particular, with average prices for operator terminals falling by more than 7.5%. Combined with a drop in the number of HMIs shipped, this led to revenue declining by nearly 10% in the region during 2012, following two years of strong double-digit growth. Even China suffered, with low demand from Europe affecting its exports, and uncertainty over changes in the political environment impacting negatively on investment.

Relatively strong investment in manufacturing in northern Europe, including Germany, mitigated some of the negative impact arising from the area’s continuing economic problems, even though southern Europe remains weak. And despite a slight increase in the number of operator terminals sold during 2012, revenues slipped due to the falling prices.

Some of the price drops were also due to the decline in the value of the Euro. But IHS expects European revenues to grow again during 2013, more than recouping the losses of 2012.

The Americas benefitted last year from a relatively stable economy. Growth of operator terminal revenues in the US during 2012 was slow, but stable, while improved consumer confidence led to a greater willingness to invest in higher-end terminals. As a result, operator terminal revenues from the Americas grew by 8% last year.